Friday 20 May 2016

Good News And Bad News On Federal Election

It is official, parliamentary elections can have a significant impact on consumer confidence and retail sales, but it may be good or may be bad and it may reverse after an election.

We don't need to tell QVM traders that the current Federal election campaign seems to be impacting adversely on sales. Consumers listening to constant arguing and bickering between rival candidates, hearing the tales of doom if one party wins the election, and generally being subjected to negative, cynical news can hardly be blamed for putting a clamp on their spending.

Some elections are characterised by grandiose promises that actually boost consumer confidence but then when reality sets in after the election that can reverse. Other elections are characterised by fear campaigns that dampen confidence before an election, but then when a clear direction emerges, particularly if there is a new leader, the confidence rises.

A mid year campaign is considered good for retail rather than at Christmas when dampened confidence has a bigger impact. Deutsche Bank has said that Federal elections on average are not good for retail but the impact is pretty much 50/50 over the longer term. Myer has claimed that the election will impact on third quarter sales and Qantas is blaming the election on reduced bookings with travellers not wanting to be away during the voting process.

So, with an apparent negative impact in the lead up to the election lets hope for a clear result that gives consumers the confidence to go out and shop immediately after the July poll.

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